gwen: a turning point week and the white house focuses on the xi. and the focus on health care. tonight on "washington week." s at the white house, pomp, circumstance, designed to accommodate an important ali. >> the currency is a part of the problem. gwen: trying to turn the jobs picture back around. >> try to turn the economy from the brink, now our job is putting our economy into overdrive. gwen: on capitol hill. >> i don't want rationed care. gwen: a vigorous effort to roll back one of the administration

signature accomplishments. >> our goal is to stop the job destroying health care bill. >> what does it do when you look at it? it blows a hole through the deficit. gwen: washington's political chess game turns three dimensional as senators retire. >> i have decided that it is time for turn the page to a few chapter. gwen: who is likely to go next? covering the week, david wessel of the "wall street journal," peter baker of the "new york times." doyle mcmanus of the "los angeles times." and carol tumulty of the "washington post."

gwen: good evening. it couldn't have gotten any fancier in washington this week. ruffles and red carpets and famous faces and lots and lots of hand shakes. the obama administration pulled out all of the stops for jintao's visit. also went out of the way to stress the importance of the relationship. >> at a time when some doubt the benefits of the cooperation between united states and china, this visit it also a chance to demonstrate a simple truth. we have an enormous stake in each other's success. >> break down the numbers. why is china considered to be so important? >> it is simply a matter of size. in 2000, the economy of china was smaller than the economy of california. today the chinese put out their numbers this week, china is three times the size of the california economy. this was very much about doing

business. my favorite line was the president said to jintao, we want to sell you all kind of stuff, manies and cars and software. it is hard to imagine that when kissinger and nixon went to china that today they would imagine that today it would be are they stealing microsoft word, or would they prefer to buy from chinese companies than american companies. gwen: we appear to be in debt to china. is that serious or a sense of insecurityy? >> it is very serious. we ran huge deficits and borrowed lots of money with low interest rates here, because they have so much savings and they want to give it to us. that was one of the reasons why fanny and freddie were handled the way they were because they owned a lot of their debt. it was in everybody's mind that

this is our lender coming to visit. we better be polite and i think jintao was smart not to sort of needle us about it. he didn't have to. at every opportunity he resisted the chance to stick it to us a little. when asked about human rights, one can imagine at politician saying what about guantanamo bay. when asked about the currency, he may have said you're making it worse with what you're doing. gwen: that's 23409 -- that's not what this was about. it is a guy representing a country that we need them as much as they need us. gwen: not all of the issues with china were economic. there was national security issues as well. did we see progress on north korea? >> i think actually -- that was one of the more encouraging things. looks like what the u.s. officials said to china, if you don't want our aircraft carryiers around your backyard, you got to take kay of the thug

in north korea. china got the message. the administration officials said they were pleased about what they heard about iran and sudan. on that front after tension when secretary of defense dick gates went to china, the visit itself was let's all make nice. >> you mentioned human rights and needling, there's a question about whether we'll needle them about humanity rights. how -- human rights. what did president obama say about that. gwen: the peace prize this year. >> he wasn't allowed to go to the ceremony of course. the president did as little as possible. at the conference, there was a moment when he was asked about this and jintao ignored it and blamed it on the translation. another reporter pressed the case. i would love to know what jintao was thinking. he gave a standard defense and then at one point said china --

a lot needs to be done in china in terms of human rights. that was sort of a concession of some sort. the chinese didn't get to hear that. that part was not broadcast. i say it was downplayed but it came up and certainly house democratic leader nancy pelosi met when -- mentioned it when they met. >> you mention the economic agenda is not just about the united states selling stuff to china. we have a problem with their currency. problems with their policy on intellectual property and the preferal laws and government contracts. any positive movement on those fronts? >> little prove movement but -- little positive movement. on currency there was not much progress. the currency is rising too slowly for the u.s. tastes. the u.s. treasury officials today were saying they saw a little movement in the actual

language that the chinese move. the chinese is not going to moft currency because we want them to. they're going to let the currency rise if they think it is good for them to fight the inflation problem, which they have. the administration officials were encouraged at a light movement but there was no visible sign of progress. gwen: i wonder whether hu is kind of a lame duck leader in his own country and whether this helped or hurt, the trip. >> i think -- as best we could tell, he's not a strong leader compared to his predecessors. you're right. he's going to be relaysed in 18 months. -- replaced in 18 months. he came to the united states and he was clearly pleased with the reception. they seemed to care with the respect they were accorded. it was a smooth visit. bells and whistles. no interruption and then as a reward, they're letting the panda stay in washington for another five years and they cut the rent. they cut the rent. gwen: cut the rent on the pandas.

politician around the world. now to the domestics side of the story. as the president prepares to head to capitol hill next tuesday. there's little doubt that he would use his state of the union to reseize his domestic agenda. look for competitiveness and incentive and jobs. in this "new york times" magazine peter writes about how the president's economic team has wrestled with what secretary geithner called a brutal two years. now they tell us. >> it was -- gwen: they tell you. >> imagine how it has been for the american people. it is a really rough period. the president is going to get up there and he has to try to explain to the people why in fact things are beginning to get better without looking overly optimistic. he has a case to make. the banks obviously are healthy. they returned most of the tarp money with interest. the auto makers are back. they're selling cars, they're -- they're selling shares. the government is getting out of g.m. to some extent. -- extent. profits are up. and boardrooms, markets are up.

yet, yet, yet, 9% plus unemployment. 20 months straight. if you count people that want jobs but don't look for them anymore or who are working part time and want full time jobs, we're talking 17%. one out of every six americans would like a full time job they're not getting. this is the conundrum. he can't make the case it is going too well because a lot of places they're not. gwen: we heard that the next two years is getting the economy in overdrive. what does that mean? >> the problem is we're seeing modest growth. it takes a certain amount of growth, economists say 2.5%, to handle newcomers. to knock that down, you need overdrive, you need to have much more robust growth. the mesh rourker -- the american worker is -- is productive. they're thought seeing enough

new jobs. gwen: a part of your story was your description of how dysfunctional and how much tension there are had been within the president's economic team for the past two years as they had been trying to deal with the problems. the messy divorce. >> there's a bunch of new players, what can we expect from them? >> the president assembled a new team to joyce republicans and for the with each other. i think you'll see perhaps a team that is less engaged in the personality conflicts, the last one was mired in at times. some of them worked together. gene sperling and jack lou were officials in the clinton administration and know each other well. sterling just got done. they may have the obama ethos. the team that the president had at first was big egos because he had a big crisis.

you had to take the most brilliant minds and bring them at whatever risk of personality conflict because you didn't have a choice. now we're at a different stage of recovery. he's looking for a person exem plied by sperling who can marry politician and media. and less about macro economics than trying to manure in the new political environment. >> what tools does this president have available to him? the stimulus is running out. states and munn pats are going bust -- money pats are going bust. he wants to talk about deficit reduction but you can't increase stimulus and reduce deficit at the same time. at a meeting, they're talking about the future and state of the union we're about to see text week. what ideas you have. present ideas. he's frustrated. he says i keep telling you, bring what excites me. none of this excites me. had he has used tools.

it is a different moment. rogue economists say, he put everything in place that he can and a matter of watching to see it take effect and it is painfully slow for people that don't have work to watch this play out. >> can they do business with the republicans on this? >> if you could have a parlor game tuesday night, count the times you hear jobs and competitiveness. competitiveness is a convenient rubric that may bring republicans together. we are for american doing better against our economic competitors trying the most notably. so within that rubric he puts his own priorities, education reform. infrastructure, high-speed trains and research and he could define those things within the context. whether the republicans go along with it is the question. gwen: brought into the newly restructured job is a signal of

some kind. to c.e.o.'s that's a part of it too. we'll see whether they sit together on tuesday night and agree with that. okay. thank you meanwhile on the house side, they voted to repeal health care this week, which doesn't mean health care will be repealed. and republicans said the law will kill jobs, but democrats said it won't. in your own words it was a debate that took us through the political looking glass again. first, to the jobs claim. did we ever figure out who was right and wrong about whether this indeed is a job-killing health care law? >> first of all, this is the new civil washington. it is not job killing, it is job crushing but to answer the question, no. the most frustrating thing about the debate is each side using the talking points. if anything they got farther apart on what the facts are. is this a job killing law or not? the problem is there are too

many moving barts in the -- parts in the american economy to come up with an easy simple abc -- simple answer on that. two quick points. it imposes costs on businesses, so yes at the margins some employers will go slower and not hire some people, you could think of it as a little like a raise in the minimum wage. same effect but does it kill the economy? no. second thing it does, it'll give more people the freedom to decide to retire early or reduce their hours, to not hang on to jobs they're only keeping because they need the health insurance. there's -- there was a can he bait -- there was a debate was that a logs of jobs, but it could mean people leaving the labor force, it is hard to get through the wash in the net. finally, if you talk to economists and especially optimistic democratic economists, they'll tell you that eventually a good health care system will produce a efficient economy, because

people will be healthier and it'll be more efficient. people won't hang on to jobs they don't like or not request at. they'll be able to move. entrepreneurs will go on their own. that should produce over the long run a more efficient economy and growth. >> the republicans are pushing this because they believe the health care bill is truly unpopular with the people. there's evidence of that the polls. are they taking a wyze bet, do you know? >> -- wise bet? >> we don't know. it is important to look inside the numbers on what they call the wildly unpopular bill. the republicans are right. if you ask people straight up, do you repeal the bill or keep the bill? you get a 50-50 split. it is this way and that way. you take that half of the country and say, let's scrap this bill and ask them what is your beef with it? almost a third of the people don't like the bilbao it didn't go far enough. there are liberals criticizing

from the left, they're not in the same camp. it is kind of a deceptive number. it may or may not be as unpopular as that. >> we heard on the floor of the house, this is going to blow a hole this the budget. does it? democrats say the other way around. they say it reduces the deficit and saves money. that one, peter, depends on if you're an optimist or pessimist -- pessimist. the biggest piece of cost saving is if this new plan helps bring medicare costs under control, helps make medicare more efficient and if you think congress will actually bite the bullet and do that, which will mean in some cases telling people they can't get all of the medicare they want, there could be huge savings, about if you think congress will-win out, there won't be. >> what is next? was this hollow symbolism?

gwen: hollow symbolism in congress? >> they're -- so so long as the vote was over with, mitch mcconnell said we'll have the same vote in the senate and the harry reid said not likely. does this go anywhere from here? >> it does. it was symbolic but i don't think it was holl hoe. i think it was meaningful. gwen: what that means. >> this was the first salvo in what is going to be a year-hong, probably two year long republican gir la war against the -- ger la war with the health care plan. they'll try to defund it and there's a proposal to prohibit the government from the courts. that's probably not legal. they'll try to take funding from it and throw sand in the gears. the other things that the house leadership ininstructed its new chairman to do was sit down and

produce finally a real republican health care bill that does all kinds of good things, lets kids stay on the plan until they're 26. the popular stuff, but lowers costs, has no individual mandate. if they could pull that off, that will be a miracle because thob been able to figure out how to do it. but if they could do it, they'll deserve every reward they get. >> that's what they're doing on capitol hill, governors are taking steps. we'll watch it a lot. thanks. >> since it is never -- too early to look ahead to the next election, we're here tonight to consider the careers of senators kent conrad and joe lieberman who announced this week they will retire in 2012. >> i don't believe that the balance of power is likely to be changed by my decision. i will be here the next two years and then there'll be an election in north dakota hopefully they'll choose somebody good to take my shoes. people of north dakota have good judgment.

>> that was not an easy decision for me to make because i loved serving in the senate, and i feel good about what i have accomplished. but i know that it is the right decision and i must say, having made it, i am excited about beginning a new chapter of life with new opportunities. gwen: there's a potential for a ripple effect to especially affect -- negatively affect democrats. >> that's right, we had three of these, kay bailey hutchison and then these two. the net effect is likely to be texas stays in republican hands. joe lieberman is -- is technically an independent but he does caucus with the democrats and on most things he votes with the democrats. gwen: quietly. >> so probably a -- if you were to look at the politician, probably a democrat wins. that stays the same. and then kent conrad, though, that seat is -- very likely to switch into republican hands.

so, what i think is over it begins to underscore is the degree to which the democrats in the senate particularly are going to be playing defense over the next two years. the number to look at here, the map is there will be 33 seats on the ballot in two years. 23 of those are current le held by democrats and a lot of those are very conservative states. so you're going to see a lot of senators right now, because there is the time whether you have to -- to startinging -- thinking about the decision, you have to give your party back if the home state time to figure out somebody else to run. to raise the money. and a lot of these men and women are looking at very -- very difficult races two years from now. it becomes a question of -- gwen: decision whether you could win. >> on the other hand, it was the republicans who were if almost this exact situation two years ago, back then, i looked it up

today, they were defending 19 seats to 15 for the democrats. everybody thought it would be the republicans when were on the defense. but the political climate changed so much in those two years that they actually picked up seats. i think that a lot of democrats are particularly -- they're taking a look at barack obama's popularity beginning to come back. they're looking at economy, possibly coming back. this may not be quite the -- the disaster that -- it -- it looks like if you again just look at the map. >> it -- the questions, you didn't see senators talking about whether to -- to seek re-election or not. you saw the president this week beginning to take moves in that direction too. didn't you? >> yeah. it was an interesting move. the president. we have seen incumbents move their headquarters out of washington before. but this was a real effort, the obama campaign wants to go back to chicago, where it was started

to try to -- both get distance from this whole washington game that they been immersed in. also to try to rekindle a little bit of the energy. they did something else that was interesting too. they decided to move the political operation out of the white house. it is going to go to the democratic national committee. it is going to go to the chicago campaign headquarters. that doesn't been that politician will cease to be practiced in the white house of course. david pleth who was the president's campaign manager is actually moving into the white house. i think again that is probably more symbolic but they're trying to make a statement here. >> you mentioned the president's popularity was up. it was three months ago that the president took in his words a shellacking and we were ed aing the political obits on barack obama. did something change suddenly in the last three months and he's popular again? >> his numbers moved up in our "washington post" poll, he was

up to 54% job approval. that's pretty solid given what is going on in the economy. >> higher than it had been. >> higher than since last spring. other polls show the same trend. a couple of things happened respect productive lame duck session. the tragedy, i think his speech was well received. we'll see what the state of the union brings us. gwen: this'll be a fruitful week. we send out condolences to the family of sergeant shiver, the first director of the peace corps. he was a live long champion of the poor and underprivileged. he passed away this week at the age of 95. thank you, everyone, the conversation continues online. we're going to pick up where we left off and make them tell me what the president will say sft

state of the union speech. watch for the president's speech and we'll see you again around the table, next week on "washington week." good nide.

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